Correlation Between Izmir Demir and Kardemir Karabuk
Can any of the company-specific risk be diversified away by investing in both Izmir Demir and Kardemir Karabuk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Izmir Demir and Kardemir Karabuk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Izmir Demir Celik and Kardemir Karabuk Demir, you can compare the effects of market volatilities on Izmir Demir and Kardemir Karabuk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Izmir Demir with a short position of Kardemir Karabuk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Izmir Demir and Kardemir Karabuk.
Diversification Opportunities for Izmir Demir and Kardemir Karabuk
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Izmir and Kardemir is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Izmir Demir Celik and Kardemir Karabuk Demir in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kardemir Karabuk Demir and Izmir Demir is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Izmir Demir Celik are associated (or correlated) with Kardemir Karabuk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kardemir Karabuk Demir has no effect on the direction of Izmir Demir i.e., Izmir Demir and Kardemir Karabuk go up and down completely randomly.
Pair Corralation between Izmir Demir and Kardemir Karabuk
Assuming the 90 days trading horizon Izmir Demir is expected to generate 1.39 times less return on investment than Kardemir Karabuk. In addition to that, Izmir Demir is 1.17 times more volatile than Kardemir Karabuk Demir. It trades about 0.08 of its total potential returns per unit of risk. Kardemir Karabuk Demir is currently generating about 0.13 per unit of volatility. If you would invest 2,650 in Kardemir Karabuk Demir on September 12, 2024 and sell it today you would earn a total of 176.00 from holding Kardemir Karabuk Demir or generate 6.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Izmir Demir Celik vs. Kardemir Karabuk Demir
Performance |
| Timeline |
| Izmir Demir Celik |
| Kardemir Karabuk Demir |
Izmir Demir and Kardemir Karabuk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Izmir Demir and Kardemir Karabuk
The main advantage of trading using opposite Izmir Demir and Kardemir Karabuk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Izmir Demir position performs unexpectedly, Kardemir Karabuk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Kardemir Karabuk will offset losses from the drop in Kardemir Karabuk's long position.| Izmir Demir vs. Galatasaray Sportif Sinai | Izmir Demir vs. Silverline Endustri ve | Izmir Demir vs. MEGA METAL | Izmir Demir vs. Bms Birlesik Metal |
| Kardemir Karabuk vs. Ayes Celik Hasir | Kardemir Karabuk vs. Trend Gayrimenkul Yatirim | Kardemir Karabuk vs. Ege Endustri ve | Kardemir Karabuk vs. Alarko Carrier Sanayi |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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